May 6, 2008
That Was Then, This Is Now (And Why Was Warren Buffett Selling?)
“[Warren] Buffett said he sold two residential units in San Francisco about two years ago. The real estate agents wanted him to list one of the properties for $995,000, but Buffett listed it above $1 million and it sold for $1,750,000 in one day, the billionaire recalled.
"There were 20 buyers that day," Buffett said during a press conference. "That wouldn't happen now -- it wouldn't happen in San Francisco today."
∙ Buffett will look at RBS insurance unit [MarketWatch]
First Published: May 6, 2008 7:30 AM
Comments from "Plugged In" Readers
And Buffet knew how much it would go for too. Right. "A residential unit." Sounds pretty fishy. One guy can't know everything about every aspect of american commerce. Even Warren Buffet. They were off by 800K? He knew better than the local experts? riiiiiighht.
Posted by: fluj at May 6, 2008 9:08 AM
What's more impressive to me is the impeccable timing that he had which is what he is more known for. In typical WB fashion he sold at the peak as a good investor would. Brilliant.
Posted by: loudnclear at May 6, 2008 9:18 AM
I once saw Warren Buffet sneeze with his eyes open.
Posted by: Homes R Us at May 6, 2008 9:20 AM
i'm sure warren buffet's advisors know a little more than your average SF RE agent.
Posted by: Spencer at May 6, 2008 9:21 AM
"They were off by 800K? "
My guess is the agent wanted to list it below a million to spark interest and generate a bidding war.
Posted by: phatty at May 6, 2008 9:28 AM
Warren Buffet would hire local experts. This story rings false. They don't qualify what the property was or anything. How often was anybody off nearly 100%, on a condo? I'd say never.
Posted by: fluj at May 6, 2008 9:30 AM
What's more, they don't tell us what it was yet go on to say that it couldn't possibly attain the same price now.
Well, we all see units going for huge bucks every single day on here. Special units to be sure. Not the run of the mill any longer. But are we to also believe Warren Buffet got in early on a typical loft somewhere?
Baloney, six ways from Sunday.
Posted by: fluj at May 6, 2008 9:34 AM
Although they were friends, He was separated from his wife, Susan Buffet, who lived in San Francisco until her death from cancer in 2004.
Posted by: libor at May 6, 2008 9:39 AM
C'mon, gang, let's not dissect this ad infinitum. I think the salient point is that the Oracle of Omaha sold near the peak, and is commenting on how much the market has changed since then, even in San Francisco. Nothing more. It's not a dig at agents or anything. The guy is like 90 years old and probably has handlers take care of this "small" stuff for him. I doubt the numbers thrown out were meant to be taken verbatim.
Posted by: Dude at May 6, 2008 9:41 AM
He listed it "above $1 million"; who says they were off by 800k? He could have listed it for 1.5 for all we know. Wouldn't the "local experts" have been saying the situation we are in right now would never happen and that real estate will only go up? As a local expert, please tell us where prices will be next year.
Posted by: bird_man at May 6, 2008 9:41 AM
Shouldn't be too hard to look this up - he probably has well-known holding companies doing the buying/selling etc.
As for timing -- I'm sure these aren't the only two property transactions his portfolio performed over the past two years! :)
Posted by: dub dub at May 6, 2008 9:45 AM
You know what? Exactly. Oh, it could have been listed at 1.5. Shoot, it could have been listed at 1.74. Those silly SF R.E. agents. They were off by 80% on the listing price!
No. How about this. They don't tell us any material facts yet still see fit to give voice to a logical conclusion, purportedly voiced by Buffet. They present that! It's journo-speak, catering to shadenfreude to seell papers.
The piece wasn't even about that, per se. S.S. dissected one part of it, amplifying.
Posted by: fluj at May 6, 2008 9:48 AM
I am just surprised that SS didn't catch this story when it happened. SS is usually pretty good at tracking the buying and selling of the famous.
Posted by: John at May 6, 2008 10:10 AM
Fluj, you are really stretching it here. Come on, man.
You don't remember 2 years ago when listing something ridiculously low was the norm to attract 20-30 offers? And to "be off by 800k" is not the point or even a reasonable assessment of the situation. Both he and the agents knew it would go well above 1M. The listing price sounds irrelevant to be.
And while you may be one of the few intelligent agents in this city, you must realize most are complete idiots by now and have no idea what's going on. Please say you do.
Posted by: dg at May 6, 2008 10:18 AM
Honestly, I can't go along with that. Two years ago competition to get listings was fierce. And one would think Berkshire would interview potential listing agents a little tougher than most, right?
What part of this is fair? First, we no have information about the nature property. Second, we are told the agents wanted to price it lower. Third we are not told what it was priced for. Fourth, we are told what it sold for, in one day. Fifth, we are told that this could not happen again.
Guess what? 751 12th Avenue just got 21 offers last Thursday.
So it could happen again. It just did. But whatever. That wasn't even my point. My point is that it is not fair to present a logical conclusion sans material facts. That's rubbish.
It's a crock. It's typical journospeak.
Posted by: fluj at May 6, 2008 10:27 AM
Agreed on journospeak no doubt.
I don't disagree either with the lack of facts here. And yes it can happen again. I hope to be a seller when/if this madness happens again in say 15-20 years.
But as others have mentioned it isn't the point of that article. That said, just because it is light on facts doesn't mean you have to discount it as being rubbish.
Warren Buffett pretty much makes all the right calls, and apparently that includes selling at the top of the SF RE market. :)
Posted by: dg at May 6, 2008 10:46 AM
yeah it's just a weak article. I'm finna get off my soapbox now.
Posted by: fluj at May 6, 2008 10:50 AM
One simple question:
Did Warren Buffett's agent disclose who the seller was?
That's gotta be a good selling point. think about how you can impress your friends when you invite them to "Warren Buffett's old little pad"?
Posted by: San FronziScheme at May 6, 2008 10:52 AM
On the other hand, if you knew that Buffet was your seller, then you've affirmed that you're buying at the top.
Posted by: condoshopper at May 6, 2008 11:11 AM
"That's gotta be a good selling point. think about how you can impress your friends when you invite them to "Warren Buffett's old little pad"?"
I'm not so sure my friends would be "impressed" that I was buying when Buffett was selling...
Posted by: toni at May 6, 2008 11:14 AM
"I'm not so sure my friends would be "impressed" that I was buying when Buffett was selling..."
Very true, "buy what Warren is buying and sell what he is selling" sounds more logical than the opposite. Go figure.
But it makes for a good conversation piece in certain circles.
Posted by: san FronziScheme at May 6, 2008 11:41 AM
Good question Fronz, but you could look at that both ways...
Reason to buy: Warren Buffett former owner.
Reason to NOT buy: Warren Buffett is selling. :)
Posted by: dg at May 6, 2008 12:30 PM
Interesting, but google this if you think I am wrong, but I remember Warren Buffet selling his Laguna Beach home in late 2005 early 2006 also. His reason for selling was to take advantage of the "overheated" market.
Posted by: anoncensorious at May 6, 2008 12:32 PM
you are correct. he also sold one of his Laguna Beach homes.
May of 2005
Posted by: ex SF-er at May 6, 2008 1:01 PM
I would think Warren Buffet might know a few things about realtors, as BRK controls HomeServices of America Inc. Just for fun, here's Buffet on RE in 2006:
and point counterpoint:
Posted by: Anonymous at May 6, 2008 1:26 PM
Darn Warren Buffett was right on the money again. Mid 2006 looks like a top nationwide. Now whether he is right for the SF market and Laguna Beach and other resilient markets is a matter of opinion.
Posted by: San FronziScheme at May 6, 2008 1:49 PM
"We've had a real bubble to some degree. I would be surprised if there aren't some significant downward adjustments, especially in the higher end of the housing market."
In plain point of fact the higher end of the market has held up best, contrary to what Buffet said there.
Posted by: fluj at May 6, 2008 2:11 PM
Fluj, you are absolutely correct on this. ^^
Posted by: dg at May 6, 2008 2:16 PM
fluj - you are highley knowledgable in the microscopic economic market that is San Francisco real estate. Should I ever get off the fence and buy here, I might try to track you down.
Sometimes, however, any valid point you might have gets obfuscated behind overly defensive rhetoric.
Posted by: Publius at May 6, 2008 2:18 PM
held up best = not sunk as much. Since we're now down to four zip codes that haven't dropped YoY, SFAR should lobby Dataquick to start keeping track of prices on a street by street basis.
Posted by: Anonymous at May 6, 2008 2:44 PM
"Since we're now down to four zip codes that haven't dropped YoY"
ZIP codes are a poor way to designate real estate.
Posted by: fluj at May 6, 2008 3:14 PM
point taken. I'm often arguing with six different people at once though, so you know, it's sort of tough not to get defensive sometimes.
Posted by: fluj at May 6, 2008 3:19 PM
Susan Buffett, the wife of Warren, lived in San Francisco since the 70's. She passed away on July 29, 2004. She listed her home address as 2443 Fillmore Street.
Interesting side-story: when Susan moved to San Francisco from Omaha, she introduced Warren to Astrid Menks for a date. Astrid became Warren's companion for many years, even though Susan also remained in the picture. After Susan's death, Warren and Astrid married. According to Warren's daughter, the arrangement worked nicely for everyone involved.
Now, how about some details on 2443 Fillmore?
Posted by: PFalken at May 6, 2008 4:37 PM
Unless I am mistaken, 2443 Fillmore is one of those private "mail box" "UPS" stores. It is not a residence.
Posted by: Morgan at May 6, 2008 5:15 PM
2443 Fillmore appears to be residential units above a ground-floor nail shop...according to Google Maps.
Susan Buffett moved to SF in part to avoid living the lifestyle of a billionaire. She was fairly involved with the Glide Memorial Church and made substantial donations to places like UCSF.
Posted by: PFalken at May 6, 2008 5:28 PM
If true, this is a very interesting story, and very "only in San Francisco". The idea that the wife of one of the world's richest lived above a shop on Fillmore Street is very unusual. I admire her generosity and humility. Thanks for the information PFalken.
Posted by: Morgan at May 6, 2008 5:40 PM
I seem to recall the Chronicle doing a piece on his grandchildren. His granddaughter is a nanny in San Francisco.
Posted by: satchelfan at May 6, 2008 10:52 PM
Agreed! this is pure journospeak and absolute nonsense and has zero credibility. Personally, I only listen to the publicity that the National Association of Realtors puts out-- zero spin, absolutely factual, unbiased reporting . . .
Posted by: anon11 at May 6, 2008 11:43 PM
"Things are beginning to improve, but the availability of affordable mortgages is uneven around the country and sometimes within metropolitan areas," said NAR chief economist Lawrence Yun in a statement.
"As anticipated, we continue to look for a soft first half of the year, for both housing and the economy, before notable improvements in the second half," said Yun.
Posted by: San FronziScheme at May 7, 2008 7:27 AM
"Personally, I only listen to the publicity that the National Association of Realtors puts out-- zero spin, absolutely factual, unbiased reporting . . . "
Um, I think I detect a modicum of sarcasm there?
Because otherwise I'd think it necessary to point out that the National Association of Realtors is a trade group, and Marketwatch a financial news vehicle?
Posted by: fluj at May 7, 2008 9:59 AM